ND oil production total exits 2014 at record high

By Emily Aasand | February 18, 2015

The North Dakota portion of the Bakken shale play reached a record-high numbers in December 2014, producing nearly 1,227,344 barrels of oil per day (bopd) with 8,826 producing wells targeting the Bakken and Three Forks pool, Lynn Helms, director of the state’s Department of Mineral Resources, said during his February Director’s Cut.

During the press conference, Helms pointed out that crude prices were at $34.50 per barrel, the lowest since February 2009. The current rig count sits at 137 rigs, the lowest since July 2010.  

“Oil price is by far the biggest driver behind the slow-down, with operators reporting postponed completion work to avoid high initial oil production at very low prices and to achieve NDIC gas capture goals,” Helms said.

At the end of December, there were roughly 750 wells waiting on completion, but drilling permit activity increased in December as operators began positioning themselves for various 2015 budget scenarios.

On the Fort Berthold Reservation, 21 drilling rigs were producing a total of 371,440 bopd. According to the Director’s Cut, the Fort Berthold Reservation had 1,400 active wells with 165 wells waiting on completion.

Those budget scenarios include North Dakota’s two main oil tax incentives and price triggers which begin based on pre-determined oil prices.

The small tax trigger, which took effect at the beginning of the month, allows for a reduction in the extraction tax for new horizontal wells drilled in the month after the previous month oil price averaged less than $57.50 per barrel for West Texas Intermediate.

According to North Dakota’s State Tax Commissioner, Ryan Rauschenberger, completion dates are what decided whether a particular well gets the incentive or not. The well must be completed—fracked with the well head in place and producing oil being stored in tanks—in order to be eligible for the tax trigger. The effect could inhibit completions in the short term, but lead to a surge in completions during early summer. “It is an incentive to have wells completed sooner rather than later,” he said. 

 

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